Victim of a fraud of £3.35 million or approximately Rs200 million, in May 2019, David Franklin, a British national, is still awaiting explanations from the authorities and his fund manager, Finsburey Management Services Ltd. This story is about how a simple email was enough to transfer astronomical sums of his hard earned money into an obscure account in Hong Kong.

Several misappropriations probably committed by hackers have taken place over the past four years in our offshore sector amounting to several hundred million rupees. The victims are mostly clients of Management Companies (MC). If these frauds continue, it is largely due to the secrecy surrounding them for fear of tarnishing our Global Business sector and banking institutions. But there could be other reasons as well… Whatever the reasons are, it is our intention to remove the rotten apples from the barrel of the offshore sector.

The facts

On February 26, 2019, David Franklin and his wife entered into an agreement with Finsburey Management Services Ltd (FMSL), which was followed by a transfer of the sum of £3,335,845 to FMSL at the end of March 2019. FMSL, in turn and for reasons we don’t know, placed this sum in a Jonquille Trust, managed by FMSL itself. Once this sorted, communication between FMSL and Franklin was temporarily halted, the latter being taken up by his wife’s health worries.

It was not until July 9, 2019 that during a conversation with Sanjeev Lutchumun, the director of Finsburey, that David learned that his £3.3 million which were at the Mauritius Commercial Bank (MCB) had been transferred to a Hong- Kong company, Yuntu Technology Ltd. Franklin is dumbfounded because he never gave such instructions. Sanjeev Lutchmun explained to him that he had acted according to the instructions received by email from … David Franklin himself and which Franklin denies having sent. According to Hong Kong police, the Rs200 million transferred in Euros and British Pounds to Bank of Communication in Hong Kong, has already left Yuntu Technology's account and gone to at least 50 bank accounts in China. Accounts that have already been emptied.

Contentious call-back

According to David Franklin, FMSL has shown extraordinary carelessness and negligence. "The procedure is that when the MC receives a transfer order by email, it must verify by a call-back that the instructions come from the owner of the funds," he says. And this is the central and contentious point in this whole affair. During the transfer of the first tranche on May 16, 2019 – there were six in all – Lutchumun claims that he had sent a message to Franklin and, following that, made a call-back. David Franklin, on the other hand, the exchange of written messages was about another subject that had nothing to do with the funds transferred to Hong Kong. Indeed, , in his message, Lutchumun did not specify whether the subject concerned Yuntu or not. The same thing goes for Lutchumun’s claim that he had discussed the matter with Franklin over the phone: there is no trace of any call in the call log of the phone of the two people on May 16, 2019, as alleged by Luchumun. At any rate, the call back should have been done before not after the transfer order to the bank, the MCB.

The evidence we have shows some disturbing facts: even if, Finsburey's version that David had given his approval to the transfer, how can one explain that on 09.07.19, the day of the discovery of the fraud, Sanjeev Lutchumun declares to Franklin in a WatsApp message, "You are scaring me now" when the latter said to him "Sanjeev, I have no idea...about this Hong Kong company?” Shouldn't Sanjeev Lutchumun have replied that he had told him about it on 16.05.19 and that it was about Yuntun? In other words, why is Lutchumun now stating that he had indeed obtained Franklin's approval through the 'call back' of 16.05.19 when he seemed to admit on 09.07.19 that there was fraud when he exclaimed “you are scaring me now”? It should also be noted that Sanjeev Lutchumun did not declare to the Hong Kong police that there had been a 'call back.'

Refusal to submit emails

David Franklin does not understand why Finsburey refuses to submit to the FSC, the ICAC, the police, his new Trustee AAcapital and Franklin himself, the originals of the emails exchanged between the hacker and Finsburey. For him, the originals of the emails could provide information in particular on the identity of the fraudster. “Do the originals contain my grossly forged email address which would then make Finsburey guilty of gross negligence?”

David Franklin has lost count of the number of procedural breaches by Finsburey. Thus, while it was agreed that exchanges concerning investment strategies will be carried out by proton mail, an encrypted messaging system, the MC has accepted orders by ordinary mail from the fraudsters.

Other anomalies observed

At the time of the transfer, the Hong Kong company, beneficiary of the £3.3 million, Yuntu Technology, had been incorporated only six months earlier, on December 21, 2018. How did Finsburey not find this suspicious? It would seem that Finsburey didn’t hear any alarm bells even when some of the transfer orders – presumably from David Franklin – were sent in the middle of the night or early hours in the morning, UK time.

Another area of concern is that the transfers were described as loans when Sanjeev Lutchumun, a qualified Chartered Accountant specializing in Trust Tax must have known that loans between trusts and beneficiaries had been prohibited by the British tax authorities since 2018.

And what about the insurance?

The British victim is now suing Finsburey for the loss suffered by the latter's negligence. Even if he wins the case, he wonders if Finsburey will have the means to pay him the sum of £3.3m lost pounds. If the management company does not have the means to pay him, it is the insurer who comes into play. But Finsburey is only insured for a maximum sum of Rs5 million. Whether Finsburey made any claims to the insurance company even for that small amount or not is not clear.

The CCID: rien à signaler

The plaint to the Central Crime Investigation Department (CCID) is another interesting story: Sanjeev Lutchumun's statement in July 2019 (OB 824/19) was against unknown persons in Hong Kong who allegedly embezzled this money and which he claims his management company is a victim of. Franklin's complaints to the Financial Services Commission (FSC) and the Independent Commission Against Corruption (ICAC) are against Finsburey for negligence and money laundering respectively. The case had also been referred to the Financial Intelligence Unit (FIU) by the Mauritius Commercial Bank (MCB).

And the authorities in all this?

Minister of Financial Services and Good Governance Mahen Seerruttun: “ongoing investigation”

David Franklin wrote to Seeruttun on June 8 and June 20, 2020. He received no response. When contacted by us, the minister told us that he had not received the two emails, of which we have copies. He, however, says he is aware of this case – which he claims is a complex one – and that that the investigation by ’the authorities’ is ongoing. Two and a half years later! He adds that that the FSC is waiting for the results of the investigations carried out in England and Hong Kong. However, according to our information, there are no investigations currently taking place either by the British authorities or by those in Hong Kong.

FSC: “ongoing investigation”

We contacted Dhanesswur Thakoor, the CEO of the FSC. He was very cooperative and assured us that he was taking care of the investigation personally. Because, it is true, his officers have, to say the least, handled the file in a strange way. They refused any meeting with David Franklin and his lawyers. What is surprising in this case is that two FSC inspectors had visited the premises of Finsburey in 2020 and, according to Thakoor, should have seen the controversial 'call back' of May 16, 2019 from Lutchumun’s call log but they didn't bother to collect any evidence of same. And when they came back to Sanjeev Lutchumun five months later to collect the evidence, the latter informed them that the call log had been purged of this call. A lot of bad luck!

More disturbing elements

One might also wonder why Finsburey refuses to hand over the originals of the emails. Its argument is that there is a case in court. In fact, the court ordered for these emails to be handed over to David Franklin but the company refused to abide by the court ruling – a contempt of court in other words. Were the originals seen by the FSC officers? Not according to Thakoor, who promised us he would ask his investigators to secure them. We don’t know whether that will happen before or after they have been purged like the supposed WhatsApp messages.

Finsburey’s version

Finsburey does not want to officially comment on this case, saying it is before the court. AS for the MCB, it gave us the following comment: “One of our customers had their email inbox hacked by a third party, resulting in financial damage. We can nevertheless assure everyone of the full cooperation of the MCB in any official investigation by the competent authorities”.